The fight for hundreds of millions of investments: what it takes to get them to Lithuania

Investments and the number of jobs have also increased

Marius Stasiukaitis, head of strategy at Invest in Lithuania, gives the number of FDI attracted last year: “57 projects were carried out, thanks to which it is planned to create 5,000 jobs in three years and invest 134 ,5 millions. EUR to fixed assets. 30 new companies are establishing themselves in Lithuania and 27 companies already active in the country have approved their expansion plans.”

He is pleased that such projects have been announced by companies operating in the country and in the free economic zones (LEZ), such as Esco Lifescieces or Dovista.

According to Stasiukaitis, such confidence of existing investors is an important signal that Lithuania is attractive for foreign investors.

Vytautas Petružis, general director of the Kaunas SEZ Management Company, says that current results and investors’ ambitions indicate that companies planning to locate here are already planning developments in ten years or even more.

“Foreign manufacturing companies rely on employees who generate high added value and long-term projects. They are therefore unlikely to withdraw in a status quo political and economic environment, as this is simply irrational on “On the contrary, there are already some signs that investors are developing at a much faster pace than expected five years ago,” he observes.

V. Petružis shares statistics that over the last year companies located in the Kaunas SEZ invested 168 million euros. EUR, of which 106 million EUR constitutes FDI: “According to investors’ plans, ongoing projects should generate an additional 170 million. EUR FDI. In total, direct investments from established and emerging foreign-invested companies approach one billion. Limits in euros – more than 800 million. EUR has already been invested and there are plans to invest in the near future.”

Qualified employees and a business-friendly environment are an essential argument

Speaking about the decision to invest in Lithuania, Shayan Ali, director of one of the largest companies operating in Lithuania, Continental Automotive Lithuania and Continental Autonomous Mobility, said that this decision was determined by the business-friendly environment, the potential for a scientific and qualified workforce here. : “We noticed that people here are motivated and want to work and improve in the field of technology. And we wanted to start operating in exactly such a market.”

Ch. Ali is delighted that this decision has borne fruit: “Last year clearly showed that our employees were capable of making the Kaunas plant a success story. It quickly became an essential part of Continental on an international level. Our factory is one of the fastest growing factories in Continental’s history. »

Hollister Lietuva, an American joint stock company operating in the Kaunas SEZ

Saulius Bitinas, CEO of another large company, Hollister Lietuva, also located in the Kaunas SEZ, says that the open and welcoming attitude of the government, Invest in Lithuania, local municipalities, universities and the business community was important for the arrival of this investor. .

“We were convinced that it is possible to do business in Lithuania according to our own principles and culture. We realized that we can establish successful and long-term relationships here,” the interviewee talks about the circumstances that led to the decision to invest in Lithuania and is pleased that since the start of activities in 2019, Hollister Lietuva has constantly increased production capacity, providing production support services to colleagues abroad and progressing towards a center of excellence from Hollister Incorporated.

“Even though we had planned to start the second production line in 2021, taking into account customer expectations and the successful start of operations in Lithuania, we decided to bring forward the start by more than a year. This was a strategic investment by the company and allowed us to further expand our activities in Kaunas,” explains S. Bitinas.

Saulius Bitin

Poland, Hungary, Romania – major investment sites

Despite the optimistic results, it is important to keep in mind that Lithuania and its SEZs have strong competitors, which are historically taken for granted as important investment sites. According to V. Petružis, these countries are Hungary, Romania and Poland.

“They are closer to Western markets, they have historically attracted large investment projects, they are also competitive in terms of labor,” he says, adding that large investors usually include Lithuania in the list of “country of opportunity”.

“Lithuania has undoubted specialist skills and the ability to ensure rapid processes, but to win projects with high added value, we must look for opportunities to offer investors large land plots capable of meeting infrastructure needs “, says V. Petružis.

Tax incentives are important, but not enough

According to V. Petružis, as the experience of the Kaunas SEZ Management Company shows, tax benefits are not the main factor determining the choice of large foreign investors when creating manufacturing production projects in Lithuania .

“It is important to assess the supply and infrastructure of large ‘greenfield’ plots when considering large-scale FDI projects. The needs of investors are exceptionally atypical: they require intensive engineering infrastructure capabilities and vast land areas. Labor supply is another key criterion when talking to foreign investors,” he says.

V. Petružis says that these large investors settled in the Kaunas SEZ, who had specific needs for high-power infrastructure and large land plots of regular shape.

“We have responded to these needs. Therefore, to attract large investors, we must keep in mind that they need increasingly larger areas, sometimes even 70 to 100 ha, equipped with certain infrastructure” , explains the CEO of the Kaunas SEZ management company.

Offer what others don’t

The head of the Invest in Lithuania strategy recognizes that competition for foreign investments in the Central and Eastern European region is extremely strong.
“It is obviously difficult to stand out in such an environment based on land supply alone – we can hardly compete with countries like the Czech Republic or Poland in terms of absolute number of industrial territories or hectares of land. land,” he observes.

However, he is convinced that for manufacturing companies seeking to control the risks of implementing investment projects, the speed of establishment in the country can become an important reason for choosing Lithuania for their investments rather than neighboring countries .

“Therefore, ensuring the provision of plots of the required size is only one step, the level of development of their infrastructure and the package of services, the experience of installation in the country is no less important “, explains Mr. Stasiukaitis and says that it is necessary to think now about the targeted development of the territories of existing SEZs, meeting the needs of future investors.

Mr. Stasiukaitis reminds that it is very important not to forget that countries like Poland and Hungary are also constantly looking for ways to strengthen their competitive position.

“It is therefore necessary to pay constant and targeted attention to increasing competitiveness, especially when it comes to large-scale production projects focused on high added value.” Lithuania, after implementing the Green Corridor for large-scale investment projects, has taken an important step forward by creating attractive legal regulations and tax environment for large-scale manufacturing investments. However, to continue to successfully compete for attracting advanced industrial investments, amounting to several hundred million euros, we cannot stop,” recalls the head of the “Invest in Lithuania” strategy.

Shayan Ali

Homework to do

Executive Director of the American Chamber of Commerce in Lithuania Živilė Sabaliauskaitė, like the interviewed business leaders, emphasizes that long-term experience has shown that foreign investors, when choosing an investment location , attach the greatest importance to the presence of a sufficient number of specialists.

“The talent factor is one of the decisive factors for the development of a high value-added business,” she says, adding that other important aspects follow: a favorable tax system, a stable legal and political system, good infrastructure and other aspects.

“Meeting business needs in the education system is already one of the main challenges in attracting FDI,” observes Ž. Sabaliauskaitė. She is convinced that the attraction of future investments and the investment attractiveness of the country depends on how it is responded to.

“Air transport must be mentioned as one of the important moments. The more direct flights with other countries are developed, the greater the added value for the market and the more attractive the place for investment,” he quotes -she, a need often mentioned by investors.

Source: The Delfi

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